10th Circ. Successor Liability Ruling Highlights Title VII Risks

By Amy Knapp and Alexander Thomas (May 3, 2022, 2:12 PM EDT) -- Purchase agreements almost always attempt to limit potential successor liability for the purchaser of assets.

However, in U.S. Equal Employment Opportunity Commission v. Roark-Whitten Hospitality 2 LP, the U.S. Court of Appeals for the Tenth Circuit determined that a purchaser of a business's assets could face a lawsuit under Title VII of the Civil Rights Act for alleged successor liability when the purchase agreement provided for a due diligence period and the purchaser did not discover Title VII claims against the predecessor.

Employers and attorneys should be aware that the EEOC and other Title VII plaintiffs now have a more easy pleading...

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